The legalization of marijuana has come a long way in the United States, so much so that it has become a promising source of investment. While 29 states have legalized medicinal marijuana, 9 states have attained legal recreational use with minimal regulations. Unfortunately, it continues to be illegal based on the federal law, which is why the emergence of Cronos Group, a Canadian cannabis company, on US Stock Exchange as a publicly traded commodity has received a considerable amount of attention from investors. Cronos Group has officially been placed on NASDAQ through the authorization provided by the Securities Exchange Commission as the one and only firm to welcome shareholders into the cannabis industry in the States.
Previously, American businessmen have shown apprehension towards the idea of purchasing shares on the Toronto Stock Exchange, though the only route to do so was through the Exchange-Traded Fund Industry. Even so, Mike Gorenstein, the CEO of Cronos Group, stated that the shares are largely dominated by American investors. Hence, the increased accessibility attributable to NASDAQ’s acceptance of the Cronos Group means that investors can now take part in a rapidly blooming industry that has the potential to reach a $50 billion benchmark in the United States by 2026 with ease, as declared by the investment bank Cowen & Co. Such a lucrative profit margin has led to a high demand from capitalists, nonetheless, Gorenstein has made a statement to deny any claims concerning the company’s plans to step into the states “from a production or sales standpoint until cannabis is federally legal.”
From an economic standpoint, more benefits can be expected following the impending legalization of marijuana at a federal level. For instance, the increased tax revenue will no doubt aid in the US economy, which will directly affect the global economy due to the dominance of the United States on global markets. This is evident by the figures presented by the legal sales of marijuana products in 2015, which summed up to a notable $996 million. Consequently, an equally impressive amount of $135 million returned as tax revenues. This fund could vastly improve things like the education system and militarism and so forth.
In addition, the legalization could function to demolish black market sales, since consumers no longer need to resort to illegal means in order to attain cannabis products. This, in turn, benefits the economy as there are fewer trades unaccounted for. With proper regulations, the safety of consumers can be further ensured as well as the monitoring of the circulation of capital in the market. All things considered, however, oppositions towards the matter often revolve around the health concerns of users. This is forthrightly justifiable by the medicinal benefits that marijuana have shown.
Debates regarding the status of marijuana as a form of drug due to its ability to alter one’s mind and perception for a short time period and may be dangerous when it involves activities such as driving or operating heavy machinery. Be that as it may, if a substance like alcohol, that equates to the same outcome, with more proven damage to a human’s body can be legally consumed, what is stopping marijuana from becoming the next available source of entertainment like alcohol? Similar regulations such as DUIs can also apply to users in the future for safety purposes. Much like tobacco, the demand for marijuana is price inelastic, which means that regardless of price changes, or presumably law changes, those who are determined to consume will continue to find a way to do so. As such, wouldn’t it be better for the government to set regulations to ensure safety while benefitting from the tax avenue?